It’s fair to say that 2016 has been the year of the political underdog. First with Brexit and more recently Donald Trump’s presidential victory, incumbent political elites across the western world are in a state of shock.
Foreign ministers from the European Union were so concerned that they held an emergency meeting to discuss how best to approach the rising anti-establishment sentiment as well as how best to engage with a Donald Trump presidency.
While the markets across the globe briefly reflected this anxiety, they have now recovered following Trump’s victory speech promising greater public spending to bolster domestic economic growth.
It is this commitment to public spending, specifically on infrastructure and regeneration projects that has won him praise from unlikely advocates and will invite questions as to why the UK government is not following a similar approach to one of the biggest issues of our time: affordable housing.
As it currently stands, the supply of affordable housing in the UK is in dire straits, most seriously affecting the segment of the population described as ‘generation rent’ who have written off home ownership almost entirely.
The Conservatives are currently enjoying strong polling support. But with housing a high and rising priority for voters (up 3 percentage points since September 2016 alone) political advisors are coming around to the notion that development finance must come sooner rather than later, unless they, like Hilary Clinton want to be beaten by another popular political outsider - Jeremy Corbyn.
On current projections, 250,000 homes need to be built each year to keep pace with demand but with only 170,000 being constructed per annum at present (68% of the required amount) the statistics are disappointing for a party that prides itself on being the flag waver of home ownership.
That said, government policy is only part of the story. The mounting claims that some private housing developers are deliberately restricting supply to increase profitability, against a backdrop of record level planning permissions doesn’t help matters nor voter grievances.
Perhaps it is for this reason why there is talk among ministers about the rapid deployment of over 100,000 pre-fabricated homes to urgently address the shortfall and to ensure the government hits its ambitious pledge of constructing 1 million homes by 2020.
While the jury is out on whether the pejorative ‘pre-fabs’ will be a hit with the public, there is a popular alternative that the Trump campaign made abundantly clear: investment in the property and infrastructure of high-potential but chronically under-funded towns and cities otherwise known as the ‘rust belt’.
Trump Lessons in a Post-Brexit Britain
Post-Brexit, London suddenly appears vulnerable to relocating businesses, falls in inward investment and a crumbling luxury residential property market.
As such, the present is as good a time as any to look at the equivalent ‘rust belt’ towns of the UK, (mostly in the deindustrialised North) that could greatly benefit from regeneration and business relocation subsidies to better rebalance the economy.
Indeed, while surveys and commentators, including Strata report falling demand and prices for top end property in London and the South East, across the North and the Midlands, sales are holding up and are even increasing.
The projects currently underway in Hull provide a perfect example. With over £1.5 billion worth of investment pumped into the city over the past five years, Yorkshire’s only waterfront city is now enjoying a record 2.5 million people in employment, along with rising property prices that are selling fast.
With more high skilled jobs on the horizon, such as those in the renewable energy plant at Green Port, the message is clear that regeneration investment, while costly can be a success.
For the time being, the world waits to see how Trump makes good on his ambitious public spending promises, but the signs are there that if or when the UK government provides the right conditions for investors and developers, they can deliver the affordable housing and jobs that the country desperately craves.